EghtesadOnline: In view of the scale of Chinese finance coming from Iran, China’s Ambassador to Iran Pang Sen and Governor of the Central Bank of Iran Valiollah Seif in a meeting on Wednesday emphasized the importance of improving correspondent relations between Iranian and Chinese banks.

“China is Iran’s major trading partner so we are eager to extend our mutual banking relations more than before,” Valiollah Seif was also quoted as saying by CBI’s official website.

Beijing has taken a leading role in financing Iranian projects in the wake of Tehran’s 2015 nuclear deal with six world powers to which China was a signatory and guaranteed sanctions relief for the Islamic Republic in return for curbs on its nuclear program.

China National Petroleum Corporation has a 30% share in the $4.8 billion contract involving Iran, France and China to develop Phase 11 of the giant South Pars Gas Field, according to Financial Tribune.

In July, China signed a contract with Iran to finance the electrification of a 926-km railroad from Tehran to the northeastern city of Mashhad in Khorasan Razavi Province, which included a $1.5 billion loan in what was the first foreign financing in an Iranian project post sanctions.

Tending to Priorities

Seif noted during Wednesday’s meeting that the two countries conducted a significant volume of trade during the sanctions and “it is expected now that the sanctions are lifted, Iran and China’s economic and banking ties will grow on a larger scale”.

China’s Ambassador to Iran Pang Sen said his country will continue to finance Iran’s major projects.

“Considering the fact that there are too many construction projects on offer in Iran, the [Iranian] officials need to inform China of the priorities,” he saidd, adding that Chinese officials are willing to expand mutual relations to achieve important strategic goals.

He noted that after Iran’s nuclear deal, economic and trade relations between the two countries normalized and banking channels have been restored, albeit not to their full extent.

In May, IRNA reported that Iran’s trade with China registered a 70% growth under the government of President Hassan Rouhani, rising from $45 billion during the previous administration to over $76 billion (from August 2013 when Rouhani took office up to the time of the report’s publication).

The CBI governor noted that the two countries’ presidents are willing to expand ties, therefore both sides need to identify and resolve issues impeding economic and banking relations.

“In line with the proper volume of bilateral trade between Iran and China, there are many small-time merchants who are held back by undeveloped banking ties but we should resolve their issues as soon as possible,” he added.

Seif also mentioned the significant amount of petrochemical exports to China and asked for setting up a suitable payment process for paying oil revenues.

“Banks are the best and most trusted way for the settlement process and the use of moneychangers because of their high fees and lack of transparency should be reconsidered,” he said.

According to Iran-China Chamber of Commerce, Iran’s exports to China during the first half of 2017 compared with last year’s corresponding period rose from $6.5 billion to $9.2 billion, registering a year-on-year increase of 40%.

Oil was the main commodity exported by the Islamic Republic to the Republic of China.